Comparing Business Level Strategies
I compare the two companies in Diamond strategy diamond:
Arenas
Vehicles
Differentiators
Staging
Economic Logic
I believe Costco has been more successful. Based on the five generic competitive
strategies, Costco applies overall low-cost provider strategy while Whole Foods Market
applies broad differentiation strategy. To determine whether a company applies an
appropriate strategy or not, we should consider if the strategy is well matched to the
company’s internal resources and external situation. As to Costco, it has a great ability to
improve its supply chain and distribution management which could lower its total costs
and keep its costs below its competitors. With the overall low-cost strategy, Costco could
continuously maintain profits and keep its market share. About Whole Foods Market,
admittedly, the company has the resources and capabilities to incorporate unique attributes
into its products that customers will be willing to pay for. Specifically, customers who care
what they eat will pay the higher price for organic foods. However, the ability of Whole
Foods Market to distinguish itself from others is not solid. Its competitors could also sell
organic foods as WFM.